“Let’s figure out how to have competition in our schools—competition for better schools,” said Sen. Randal H. “Rand” Paul (R.-Ky.) to the American Action Forum.

“Let the students decide where to go; attach the money to the kids, and the money will go to the better schools, and the poorer schools will meet their demise,” he said.

Teachers should also receive competitive pay, without union interference, said Paul, who was joined at the forum by a panel of education experts including Zakiya Smith, Anne Neal, Jeff Selingo, and Andrew Gillen.

“Why not on occasion give a really good teacher $100,000? You’ve got to break up the idea that every teacher deserves $55,000, no more, no less—the idea that everyone’s going to contribute the same and we’re not going to reward some teachers and not re-hire some teachers,” he said.

John Stossel wrote about some 400 teachers in New York who had inappropriately touched students but could not be fired because of union agreements, said Paul. “You can’t do that. You have to change—we’ve got to break up the ideas of what we’ve been doing.”

Paul’s son tore a ligament in psychology class while the teacher sat with his feet up on the desk and let the kids play basketball every day; that teacher should not get the same pay as the teacher who works in and out of the classroom, calling parents and engaging with students to increase their test scores, he said.

Often parents cannot blame teachers for failing students, said Paul: a study by Malcolm Gladwell showed that the education gap between impoverished and well-off students widens during the summer.

“He comes to the conclusion that the only thing that he’s identified objectively through statistics that would work would be longer school-years,” he said.

Constitutionally, states, not the federal government, should manage education, he said. “There’s nothing in the Constitution that says anything about education. We’ve drifted from that.”

Increasing education funding will not fix the problem, he said.

“I think it doesn’t work. I mean, look at Washington, D.C., we spend what, $16,000–or is it $20,000–per pupil in Washington, so the school district that spends more money than any other school district in the country has arguably one of the worst educations in the country,” he said.

Annie Hsiao, director of Education Policy at the American Action Forum and major organizer of Paul’s talk, said funding for American college educations has also come to crisis.

“Based on 2009 numbers—the state of student loans right now–the default rate for student loans is 8.8 percent. Federal default rate is 13.8 percent,” she said.

“You do see a market increase in students being unable to pay back their student loans because in many cases they graduate—or in many cases they don’t graduate, half of students don’t graduate—and aren’t able to find employment because again they haven’t been equipped with the skills necessary,” she said.

“You see an increasing gap in what a college degree is and what it means,” she said.

Similarly, panelist Zakiya Smith, senior advisor for education at the White House Domestic Policy Council, said students aren’t receiving value they expect for the cost they pay.

“Most people that have gone to Ivy League colleges–the ones that probably cost the most–aren’t complaining 10 years out,” she said.

“You actually are seeing a lot of protests in places where people paid maybe $5000 out of their own pocket, and went to a state college, and have seen the cost increase, didn’t have the money to pay for it—and feel like what they got isn’t worth what they paid. It’s a value proposition,” she said.

Panelist Anne Neal, president of the American Council of Trustees and Alumni, said surveys show most colleges do not require core subjects that prepare students for the real world, leaving 18-year-olds to guess what to take.

Surveys show that at most colleges, the two most common majors in the US–business and education–require the least coursework and effort, and therefore the least preparation for the real world, she said.

Panel moderator Doug Holtz-Eakin, President of the American Action Forum said trade schools often offer good opportunities for students to learn real-world skills, but the current education system unfairly steers students away from them.

Paul and Holtz-Eakin discuss education policy

Another panelist, Vice President and Editorial Director of Chronicle of Higher Education Jeff Selingo, said with the high default rate the government also does not receive full value for the cost it puts into the system with student loans.

“We give out student loans essentially for any type of education, for any major, without knowing much about the student, and I’m wondering, for example, whether we should start thinking about giving out student loans based on major,” he said.

Another panel member, Director of Research for the Center for College Affordability and Productivity Andrew Gillen, said according to the Bennett hypothesis, restricting federal student loans to lower-income students would drive college costs down. “The more aid is targeted towards lower-income students, the less likely costs are to go up.”

“More than a third of students from families who earn more than a $100,000 a year are taking out Stafford loans,” he said.

Rep. Virginia Foxx (R.-N.C.)

The wrap-up speaker Rep. Virginia Foxx (R.-N.C.) said the forum went very well. “I’m glad to see such a good group here.”

She also said the president’s proposals–that students do not have to pay back loans if they cannot pay within 20 years—bypass the legislature and teach students irresponsibility.

Nevertheless, Holtz-Eakin said education offers great opportunity for bipartisan work. “This panel reinforces that this is an area where there is more bipartisan agreement on the failings than almost any other area, and where there’s even a fair amount of agreement on the characteristics and the solutions.”

Paul said this issue brings together unlikely allies because state-level, merit-based education management would relieve strains on teachers and strengthen good teachers.

“I think teachers are ripe for the free market limited government people to go in and talk to them and say, ‘Well, we’re your friends. We think you shouldn’t be judged on how good of a teacher you are in Washington, and that the expenditures and mandates shouldn’t come from Washington, and that empirically they’re not working.’”